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Cite As Natl. City Mtge. Co. v. Richards, 182 Ohio App.3d 534, 2009-Ohio-2556.
Cite As Natl. City Mtge. Co. v. Richards, 182 Ohio App.3d 534, 2009-Ohio-2556.
Cite As Natl. City Mtge. Co. v. Richards, 182 Ohio App.3d 534, 2009-Ohio-2556.
Appellee, :
v. : No. 08AP-630
(C.P.C. No. 05CVE12-14480)
Richards, :
(REGULAR CALENDAR)
Appellant; :
Doe et al., :
Appellees. :
D E C I S I O N
County Court of Common Pleas' entry of summary judgment and decree of foreclosure
No. 08AP-630 2
United Mortgage Company Corporation ("National City"). For the following reasons, we
{¶2} On June 22, 2004, Richards executed a promissory note (the "note") in
favor of National City in the amount of $84,500, secured by a mortgage (the "mortgage")
on her property at 1366 Frebis Avenue in Columbus, Ohio. On December 27, 2005,
National City filed a complaint in foreclosure and for reformation of mortgage against
Richards, alleging that "[b]y reason of default under the terms of the note and the
mortgage securing same, [National City] has declared the debt evidenced by said note
due, and there is due thereon from [Richards] $83,477.89, together with interest at the
rate of 6.93% per year from September 1, 2005, plus court costs, advances, and other
charges, as allowed by law." National City also alleged that the conditions of
defeasance in the mortgage had been broken and that it was entitled to have the
mortgage foreclosed.
{¶3} Richards, acting pro se, filed an answer on January 26, 2006, denying that
she was in default under the terms of the note. Specifically, Richards stated that she
paid the past-due amount, her January 2006 payment, and accrued fees on January 13,
2006, in accordance with her mortgage statement, dated December 12, 2005. That
$780.66, late charges of $169.06, and other fees of $38.00, for a total due of $3,329.70
if paid by January 16, 2006. Despite Richards's payments, however, she received a
letter from National City, dated February 1, 2006, stating that $6,838.09 was required to
No. 08AP-630 3
reinstate her loan. That total did not include credits for Richards's payments in
December 2005 and January 2006, but did include a charge of $2,630 for foreclosure
February 13, 2006, stating that she had sent National City $3,380.66 in December 2005
and January 2006 to bring her account current through January 2006, but that National
City refused her payment. Richards stated: "I * * * have enclosed the check of $3380.66
plus February's payment and other charges owed of $264.00 which will bring my
mortgage current excluding the attorney's fee which I can not afford to pay right now. I
want to set up a repayment plan for the attorney's fee with justification of their fees.
Please contact me within 7 to 10 days to have this setup so I can begin payments."
Along with a letter dated February 15, 2006, National City returned Richards's payments
of $4,167, stating that the payments were less than the total due for reinstatement.
{¶5} On February 16, 2006, National City filed a motion for summary judgment,
National City, who stated that there had been a default in payment under the terms of
the note and mortgage and that National City had elected to accelerate the entire
balance due.
appearance and filed a motion for leave to respond to National City's motion for
summary judgment and for additional time to respond pursuant to Civ.R. 56(F). On
March 24, 2006, the trial court granted National City's motion for summary judgment
No. 08AP-630 4
and issued a decree in foreclosure, but on April 24, 2006, the trial court vacated its
judgment so that it could rule on Richards's motion for leave to file a memorandum in
opposition.
{¶7} On January 12, 2007, National City filed a second motion for summary
"demand/acceleration letter," dated November 16, 2006, was sent to Richards at the
property address.
{¶8} On January 29, 2007, Richards filed motions for an extension of time to
oppose National City's second motion for summary judgment, for a revised case
schedule, and for leave to file an amended answer. The trial court denied Richards's
motion for leave to file an amended answer, but issued a revised case-management
schedule permitting Richards to file her response to National City's second motion for
{¶9} In her memorandum contra National City's second motion for summary
judgment, Richards argued that genuine issues of material fact remained as to the
following: (1) whether National City provided contractually required notice of default and
of its intention to accelerate the debt, (2) whether Richards cured her default, entitling
her to reinstatement, and (3) whether National City acted unreasonably, arbitrarily, and
possibly unreasonable, foreclosure costs and fees. In support, Richards filed her own
affidavit, an affidavit by her attorney, and various exhibits incorporated by reference into
No. 08AP-630 5
Richards's affidavit. The trial court denied National City's second motion for summary
judgment, finding that National City failed to meet its initial burden because there was
no evidence that National City complied with the notice requirements in the note and
mortgage.
{¶10} National City filed a third motion for summary judgment on October 29,
2007, supported by the affidavit of Assistant Vice President, Brian J. Arthur, who stated
that, "to the best of its knowledge," National City satisfied all conditions precedent to
foreclosure. Arthur stated that a notice of default was prepared and mailed to Richards
at the property address via certified mail, but he also stated that National City received
the certified-mail return receipt from the U.S. Postal Service, showing that the notice of
default was unclaimed. Richards filed a memorandum contra National City's third
motion for summary judgment, and National City filed a reply memorandum.
{¶11} On June 27, 2008, the trial court granted National City's third motion for
summary judgment and issued a final judgment and decree of foreclosure. The court
found that Richards failed to demonstrate a genuine issue of material fact with respect
to whether her payments to National City brought her loan current. The trial court
rejected Richards's arguments regarding National City's compliance with the notice
requirements in the note and mortgage, stating that the evidence "establishes that the
[notice of default] was delivered to [Richards's] address." The trial court also rejected
fees.
No. 08AP-630 6
II. The trial court erred in granting [National City's] Motion for
Summary Judgment because the payments Ms. Richards
made in December 2005 and January 2006 brought her loan
current and complied with [National City's] December 12,
200[5] Mortgage Statement.
{¶13} Each of Richards's assignments of error stems from the trial court's grant
novo. Koos v. Cent. Ohio Cellular, Inc. (1994), 94 Ohio App.3d 579, 588, citing Brown
v. Scioto Cty. Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711. When an appellate
same standard as the trial court and conducts an independent review, without
deference to the trial court's determination. Maust v. Bank One Columbus, N.A. (1992),
83 Ohio App.3d 103, 107; Brown at 711. We must affirm the trial court's judgment if any
grounds the movant raised in the trial court support it. Coventry Twp. v. Ecker (1995),
transcripts of evidence, and written stipulations of fact, if any, timely filed in the action,
No. 08AP-630 7
show that there is no genuine issue as to any material fact and that the moving party is
only under the following circumstances: (1) no genuine issue of material fact remains to
be litigated, (2) the moving party is entitled to judgment as a matter of law, and (3)
viewing the evidence most strongly in favor of the nonmoving party, reasonable minds
can come to but one conclusion, that conclusion being adverse to the nonmoving party.
Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66.
{¶15} "[T]he moving party bears the initial responsibility of informing the trial
court of the basis for the motion, and identifying those portions of the record before the
trial court which demonstrate the absence of a genuine issue of fact on a material
element of the nonmoving party's claim." Dresher v. Burt (1996), 75 Ohio St.3d 280,
292. Once the moving party meets its initial burden, the nonmovant must set forth
specific facts demonstrating a genuine issue for trial. Id. at 293. Because summary
after resolving all doubts in favor of the nonmoving party. Murphy v. Reynoldsburg
(1992), 65 Ohio St.3d 356, 358-359, quoting Norris v. Ohio Std. Oil Co. (1982), 70 Ohio
St.2d 1, 2.
{¶16} In her first assignment of error, Richards contends that the trial court erred
by concluding that National City complied with the notice requirements in the note and
acceleration of the note and foreclosure of the mortgage. Paragraph 6(C) of the note
No. 08AP-630 8
requires notice of default and an opportunity to cure the default as a condition precedent
Thus, before the note holder may accelerate the debt, it must provide the debtor with
written notice of default and its intent to accelerate, and it must give the debtor at least
{¶17} Both the note and mortgage contain provisions specifying requirements for
{¶18} Richards maintains that National City failed to give her the required notice
of default and opportunity to cure and that National City was, accordingly, not entitled to
accelerate the note or foreclose on the mortgage. National City responds that Richards
waived any right to challenge the acceleration by not denying its propriety in her answer
No. 08AP-630 9
and by not raising an affirmative defense with respect to failure of notice. National City
also argues that it complied with the notice requirements under both the note and
mortgage. Before turning to the merits of the notice issue, we will first address National
City's contention that Richards waived any argument regarding notice by not denying
the propriety of the notice and by not raising an affirmative defense regarding failure of
pleading is required * * * are admitted when not denied in the responsive pleading."
Pursuant to that rule, National City argues that Richards admitted that National City
complied with the notice requirements of the note and mortgage by not denying its
averments to that effect in her answer. Contrary to National City's assertion, however,
the complaint did not allege that the note was properly accelerated or that National City
complied with the conditions precedent for acceleration. With respect to the note, the
Although the complaint generally alleges that Richards was in default under the terms of
the note, it does not allege National City's compliance with conditions precedent to
enforcement of the note, including notice of default and an opportunity to cure, as set
forth in paragraph 6(C). Richards was not required to specifically deny that the note
was properly accelerated when there was no allegation to that effect in the complaint.
No. 08AP-630 10
Moreover, the absence of a denial to that effect does not result in an admission of that
unpleaded fact. See Riley v. Riley (May 8, 2000), 12th Dist. No. CA99-06-107, 2000
division of property, Civ.R. 8(D) was inapplicable, and the defendant admitted nothing
with respect thereto by failing to file a responsive pleading); Union Bank & Trust Co. v.
Mercer Composting, Inc. (Sept. 23, 1998), 3d Dist. No. 10-98-8, 1998 WL 668736
(noting that when failure to answer resulted in averments being viewed as admitted, the
{¶20} In a related argument, National City contends that Richards was required
affirmative defense in her answer and that her failure to do so constitutes a waiver of
her right to defend on that basis. Civ.R. 8(C) generally requires a defendant to plead
any defense constituting an affirmative defense. Affirmative defenses other than those
listed in Civ.R. 12(B) are waived if not raised in the pleadings. Jim's Steak House, Inc.
v. Cleveland (1998), 81 Ohio St.3d 18, 20. An affirmative defense, however, is not the
merits of the plaintiff's cause of action and bars recovery even when the plaintiff has
established a prima facie case, a condition precedent is directly tied to the merits of the
plaintiff's cause of action, which is itself contingent upon satisfaction of the condition.
See Lewis v. Wal-Mart, Inc. (Aug. 12, 1993), 10th Dist. No. 93AP-121, 1993 WL
v. Northeast Ohio Regional Sewer Dist. (Jan. 23, 1986), 8th Dist. No. 49132, 1986 WL
1061.
precedent," and it is subject to the requirements of Civ.R. 9(C). First Financial Bank v.
Doellman, 12th Dist. No. CA2006-02-029, 2007-Ohio-222, ¶20. Civ.R. 9(C) provides:
aver generally that all conditions precedent have been performed or have occurred. A
This court discussed the requirements for pleading conditions precedent in Lewis, in
{¶22} Doellman involved facts similar to those involved here, and we agree with
the Twelfth District's analysis in that case. There, the defendants-mortgagees opposed
No. 08AP-630 12
the bank's motion for summary judgment in a foreclosure action, arguing that they had
not received notice of default and had not been given an opportunity to cure, as
required by their note and mortgage. The bank argued that the defendants could not
raise lack of notice in opposition to summary judgment because they failed to raise that
issue in their answer to the complaint. The defendants' answer alleged that the bank
failed to state a claim upon which relief could be granted, but it did not specifically allege
that the bank failed to give the defendants notice of default. The court held that the
defendants were not required to plead failure of notice with particularity because the
complaint did not allege, even generally, that the bank complied with conditions
precedent in the note and mortgage. Therefore, the court found it sufficient that the
defendants alleged failure to state a claim upon which relief could be granted. See also
Washington Mut. Bank v. Cowles, 11th Dist. No. 2006-A-0076, 2007-Ohio-4771, ¶34
precedent in a foreclosure action, a defendant need not comply with the particularity
neither specifically alleged that National City failed to comply with a condition precedent
by properly giving her notice of default nor alleged that National City failed to state a
claim upon which relief could be granted in its foreclosure complaint. Nevertheless, we
reject National City's argument that Richards waived the opportunity to rely upon failure
not allege, even generally, that National City complied with the conditions precedent to
No. 08AP-630 13
accelerating the debt under the Note or filing a foreclosure action. Under these
circumstances, Richards was not required to allege the failure of a condition precedent,
based on lack of notice, with specificity. See Doellman, 2007-Ohio-222, ¶ 21. Instead,
a general defense of failure to state a claim upon which relief could be granted would be
{¶24} A defending party may raise the defense of failure to state a claim upon
which relief may be granted as late as the trial on the merits, and the defense is not
waived by failure to assert it in a pleading or motion. Ford v. Tonti (June 15, 1995), 10th
Ohio App.3d 110, 112; Civ.R. 12(B)(6) and 12(H)(2); Cowles, 2007-Ohio-4771, ¶ 35.
While Richards did not expressly raise a defense of failure to state a claim upon which
relief could be granted in her answer, her failure to do so does not operate as a waiver
of her arguments regarding National City's compliance with the notice requirements,
National City's motion for summary judgment. While National City responded to
Richards's argument regarding satisfaction of the notice requirements in both its reply
memorandum in support of its second motion for summary judgment and in its third
motion for summary judgment, National City did not argue, before the trial court, that
Richards had waived her arguments regarding notice. Moreover, the trial court
expressly considered the notice issue raised by Richards when deciding both National
City's second and third motions for summary judgment. Therefore, we discern neither
waiver by Richards nor any other reason that would preclude this court from reviewing
No. 08AP-630 14
whether National City complied with the conditions precedent to acceleration and
whether National City complied with the notice requirements in the note and mortgage,
thus fulfilling a condition precedent to its acceleration of the note and foreclosure of the
mortgage. National City argues that it complied with the requirements of the note and
Richards, on the other hand, contends that National City neither mailed the notice of
default by first class mail nor actually delivered it to the property address, as required by
the terms of the note and mortgage. Therefore, she maintains that she was denied a
30-day period to cure her default before acceleration. We bear in mind that in reviewing
National City's motion for summary judgment, we must view the evidence in the light
{¶26} The express language of the note and mortgage requires that notice be
given by either first class mail or by delivery to the property address or other address
provided by the mortgagee. National City did not send the notice of default via first
class mail. Instead, it sent the written notice of default by certified mail to Richards at
the property address. National City states that it utilized certified mail to ensure that
Richards received the notice of default. However, National City subsequently received
a certified-mail return receipt, stating that the certified mail had been unclaimed. In her
affidavit, Richards stated: "I do not recall receiving this letter at all. I definitely do not
{¶27} National City disputes Richards's argument that return of the certified-mail
it complied with the requirements of the note and mortgage, National City relies on Fed.
Natl. Mtge. Assn. v. Doyle (Oct. 9, 1998), 6th Dist. No. L-98-1010, 1998 WL 700663, a
plainly distinguishable case. The Doyle court applied the "mailbox rule," which
reject a mortgagee's argument that he did not receive notice of default by certified mail,
as required by the mortgage. Id., citing Cantrell v. Celotex Corp. (1995), 105 Ohio
App.3d 90, 94. In Doyle, the plaintiff submitted an affidavit in support of summary
judgment, stating that it mailed a notice of default by both certified mail and ordinary
mail to the property address. While the certified-mail envelope was returned as
unclaimed after three delivery attempts, the ordinary-mail envelope was not returned as
undeliverable. Thus, based on the unreturned ordinary mail, the court concluded that a
rebuttable presumption arose that the mortgagee received actual notice of default
despite his failure to claim the certified-mail notice. Because the record contained no
evidence disputing the mortgagee's receipt of the notice of default, the court rejected
the mortgagee's argument based on failure of notice and affirmed the summary
{¶28} Here, had National City mailed its notice of default via ordinary, first class
mail, it would not only have been entitled to a rebuttable presumption of delivery based
on the mailbox rule, but would have satisfied the express requirements of the note and
mortgage. By contrast to the facts in Doyle, however, National City mailed its notice of
No. 08AP-630 16
default to Richards only by certified mail, which was returned to National City
unclaimed. National City did not mail a notice of default by ordinary mail, either
rebuttable presumption had arisen upon National City's certified mailing, the
presumption was decisively rebutted by the uncontradicted evidence that the certified
note and mortgage, National City suggests that the postal service's unsuccessful
attempts to deliver the certified mail to Richards's property address equate to delivery,
as permitted in the note and mortgage as an alternative to first class mail. We disagree.
(Random House 1997). The postal service did not give or yield possession of the notice
of default to Richards. To the contrary, each attempt by the postal service to transfer
the notice to Richards failed, ultimately leading to the postal service's return of the
notice to National City. Notification that certified mail is being held for a recipient is
undeniably distinct from delivery of the certified-mail contents. Here, the postal
service's return of the certified-mail envelope to National City eliminates any possible
{¶30} From the pleadings and the evidence in the record on summary judgment,
we conclude, as a matter of law, that National City failed to give Richards the
No. 08AP-630 17
contractually required notice of default and an opportunity to cure her default before
accelerating the balance due on the note and initiating proceedings to foreclose on the
mortgage. Therefore, we sustain Richards's first assignment of error. Having done so,
Richards's attempts to bring her loan current and regarding the propriety and
{¶31} For these reasons, we reverse the judgment of the Franklin County Court
Judgment reversed